What is the maximum loan-to-value (LTV) ratio for expat and UAE national borrowers?

The LTV ratio is another important factor that has been adopted by lenders in the UAE to determine the level of risk that is incurred in case of mortgage. It is the calculation of the amount of loan that was taken against the property that was bought. Here’s a detailed look at the maximum LTV ratios for expat and UAE national borrowers:

For UAE Nationals:

  • First Property Purchase:
    • The first time home buyers in the UAE can get up to 85% LTV for purchasing a property. This means that they require the clients to make a minimum down payment of 15%.
  • Subsequent Property Purchases:
    • For any other properties, the LTV ratio is set at 75% which means that one has to come up with 25% of the purchase price as a down payment.

For Expats:

  • First Property Purchase:
    • Non residents in the UAE can obtain financing of up to 80% of property value for the first property purchase which is equal to 20% down payment.
  • Subsequent Property Purchases:
    • For any other properties the loan to value ratio is 65 percent and this means that the down payment will be thirty five percent.

Important Considerations:

  • Off-Plan Properties:
    • For off-plan properties, the LTV ratios are lower most of the time. Emirati citizens can get maximum of 50 percent of LTV while foreigners are allowed to get up to 40 percent LTV.
  • Property Value:
    • The above LTV ratios normally apply where the property in question is valued at AED 5 million or less. For properties above this value it is possible that different LTV ratios will apply.

LTV ratios are prescribed by the UAE Central Bank and are meant to regulate the property market, limit excessive borrowing and support stability. These laws also go a long way in protecting both the lenders and the borrowers in that the borrowers have to have sufficient equity in their property.


Maximum Loan-to-Value (LTV) Ratio Quiz


75%
80%
85%

70%
75%
80%

70%
75%
80%

60%
65%
70%

30%
40%
50%

Quiz based on information from 95dubai.com